The Best Invoice Factoring Companies in the UK: Unlocking Cash Flow for UK Startups

Key Takeaways:

• Invoice factoring is a financing solution that allows small businesses to access immediate cash flow by leveraging unpaid invoices.
• The UK offers a wide range of invoice factoring companies with varying maximum release values and services.
• Choosing the right invoice factoring company is crucial for UK startups to ensure smooth cash flow management and credit control.
• We have analyzed and compared the top invoice factoring providers in the UK, highlighting their features, maximum release values, and application processes.
• By understanding the options available, UK startups can make an informed decision when selecting the best invoice factoring company for their business needs.

1. Introduction

As a UK startup, managing your cash flow is crucial for sustaining and growing your business. One effective solution for accessing immediate funds is invoice factoring. By partnering with an invoice factoring company, you can unlock the value of your unpaid invoices and maintain a healthy cash flow.

This comprehensive guide will provide valuable insights into the best invoice factoring companies in the UK specifically tailored for startups. We will analyze the top providers, compare their features, and help you make an informed decision when choosing the right invoice factoring company for your business.

2. How Does Invoice Factoring Work?

Invoice factoring allows businesses to receive a portion of their unpaid invoices upfront, providing immediate access to cash. Unlike traditional loans, invoice factoring is not a debt; it involves selling your invoices to a third-party provider at a discounted rate. The factoring company takes over the responsibility of collecting payments from your customers, allowing you to focus on your core business operations.

The process typically involves the following steps:

1. You raise an invoice and submit it to the factoring company.
2. The factoring company verifies the invoice and offers you an advance, usually up to a certain percentage (e.g., 90%) of the invoice value.
3. The factoring company collects the payment from your customer on the due date.
4. Once the payment is received, the factoring company deducts its fees and transfers the remaining funds to your business.

3. The Benefits of Invoice Factoring for UK Startups

Invoice factoring offers several advantages for UK startups, including:

• Improved Cash Flow: Access immediate funds to cover operating expenses, invest in growth initiatives, or manage unexpected costs.
• Reduced Administrative Burden: Outsourcing credit control and collections to the factoring company saves you time and resources.
• Sales Ledger Support: Factoring companies often provide sales ledger management services, ensuring efficient payment processing.
• Credit Protection: Some providers offer bad debt protection, safeguarding your business against non-payment and insolvencies.
• Scalability: As your business grows, the factoring facility can expand with your sales, providing ongoing support.
• Focus on Core Activities: By delegating credit control tasks, you can concentrate on delivering products or services to your customers.

4. Choosing the Right Invoice Factoring Company: Key Considerations

When selecting an invoice factoring company for your UK startup, consider the following factors:

1. Maximum Release Value: Different providers offer varying percentages of your unpaid invoice values. Assess your funding needs and choose a company that offers the desired advance rate.
2. Industry Expertise: Some factoring companies specialize in specific industries. Look for providers experienced in your sector, as they can better understand your business’s unique challenges.
3. Credit Control Services: Evaluate the quality and effectiveness of the factoring company’s credit control and collections processes. Efficient credit management ensures timely payment collection and reduces the risk of bad debts.
4. Application Process: Consider the ease and speed of the application process. Look for providers that offer convenient online applications or streamlined phone-based processes.
5. Additional Services: Assess if the factoring company offers value-added services such as sales ledger management, online account access, or integration with accounting software.
6. Fees and Terms: Understand the fee structure, including service charges, transaction fees, and any hidden costs. Compare the terms and conditions offered by different providers to find the most competitive rates.
7. Reputation and Reviews: Research the reputation and customer reviews of the factoring companies you are considering. A solid track record and positive feedback indicate reliability and customer satisfaction.

5. Top Invoice Factoring Companies in the UK

Now let’s delve into the top invoice factoring companies in the UK, assessing their features, maximum release values, and application processes.

5.1 ABC Finance

ABC Finance offers a range of invoice finance products, including factoring. With a maximum release value of 95%, ABC Finance allows businesses to access a significant portion of their unpaid invoices promptly. They provide a brokerage service, enabling you to find the best invoice finance options. ABC Finance has a simple application process with no brokerage or upfront fees. Apply over the phone for fast and efficient service.

5.2 ABN AMRO Commercial Finance

ABN AMRO Commercial Finance offers invoice factoring services tailored for both start-ups and established businesses. With up to 90% of invoice values released, they provide flexible finance solutions that can grow with your business. ABN AMRO Commercial Finance has an experienced credit control team to manage your payments efficiently. Their online management platform and dedicated Credit Controller make the process seamless. Apply over the phone to discuss your requirements.

5.3 Advantedge

Advantedge offers a variety of invoice financing options, including factoring. They release up to 90% of the invoice value and provide a credit control and sales ledger management service. With online management and funds available on the same day if loaded before midday, Advantedge caters to SMEs and start-ups with sales invoices. They also offer Bad Debt Protection. Apply over the phone to learn more about their services.

5.4 Aldermore

Aldermore provides a range of invoice financing products, including factoring. With access to up to 90% of your unpaid invoices, Aldermore offers a full credit control service. Their individually designed packages can grow with your sales, ensuring a tailored solution. Aldermore provides online access to the facility and a dedicated Relationship Manager for personalized support. Optional Bad Debt Protection is available. Apply over the phone to discuss your funding needs.

5.5 Bank of Scotland

Bank of Scotland offers a choice of invoice finance options, including factoring. With up to 90% of unpaid invoice values released, Bank of Scotland provides quick access to funds. They also offer sales ledger management support to streamline your credit control processes. Bank of Scotland operates in partnership with Lloyds Bank. Apply through Lloyds Bank for their invoice discounting services, which they deliver together.

5.6 Bibby Financial Services

Bibby Financial Services offers a comprehensive range of invoice finance solutions, including factoring. They can release up to 100% of your invoice values, providing funds within 24 hours. Bibby Financial Services grows in line with your sales and offers rolling contracts for flexibility. Their online account management system allows you to manage customer payments conveniently. You can request a call back to enquire or apply for their services.

5.7 Close Brothers

Close Brothers offers invoice finance solutions, including factoring. With up to 90% of unpaid invoices released, Close Brothers provides expert credit management services. They ensure discreet payment collections and instant payment receipts. Close Brothers offers individually priced plans tailored to your specific needs. Their online account management and dedicated relationship manager provide seamless support. Apply over the phone or enquire online for their services.

5.8 Danske Bank UK

Danske Bank UK provides a range of invoice finance options, including factoring. They advance up to 85% of invoice values and become your credit control team, managing your outstanding invoices. Funding is received the same day if invoices are received before 11 am. Danske Bank UK works alongside your existing bank facilities and requires you to have a Danske Bank business current account. Rates and terms are subject to their assessment of your business. Apply over the phone to discuss your eligibility.

5.9 giant finance+

giant finance+ offers a factoring-style invoice finance solution. They can release up to 100% of unpaid invoices, providing a credit control service and chasing invoice payments on your behalf. giant finance+ uses your payment terms and manages all your payment processes. They offer a fast and simple facility to access funding. Bad debt protection can also be included. Apply over the phone to explore their services.

5.10 Hitachi Capital

Hitachi Capital offers a range of invoice finance options, including factoring. With up to 90% of unpaid invoices released, Hitachi Capital provides funding within 24-48 hours. Their team of expert credit controllers collects payments on your behalf. Hitachi Capital offers a disclosed service, where the service fee is deducted from customer payments. They also provide an invoice factoring calculator to help you understand the cost. Apply over the phone to discuss your funding requirements.

5.11 HSBC

HSBC offers a choice of invoice finance products, including factoring. With up to 90% of invoice values released, HSBC provides sales ledger management services and manages customer payments. Funds are received the next working day, ensuring a secure funding service that can grow with your sales. HSBC offers a dedicated Credit Controller and the option to add credit protection for bad debts and late payments. Apply over the phone to explore their invoice factoring services.

5.12 Lloyds Bank

Lloyds Bank offers a range of invoice financing options, including factoring. With up to 90% of invoice values released, Lloyds Bank provides a full factoring service. Funds are received within 24 hours, and they manage your sales ledger and support your credit control processes. Lloyds Bank’s factoring facility grows with your business sales and is supported by a dedicated Client Manager. Businesses with a turnover above £50,000 are eligible. Apply over the phone to discuss your funding needs.

5.13 MarketFinance

MarketFinance offers a variety of invoice finance solutions, including factoring. They provide contract or pay-as-you-go payment choices, allowing you to select the most suitable option. MarketFinance offers selective invoice factoring, where you choose which invoices to factor, as well as full invoice factoring. They can release up to 90% of the unpaid invoice value and provide an easy-to-use platform. With no hidden fees, you can apply in minutes and receive dedicated account management. Apply online or over the phone to explore their services.

5.14 Metro Bank

Metro Bank offers a choice of invoice factoring and discounting services. With a flexible system, they can advance up to 90% of the sales values. Funds can be received within 24 hours, providing quick access to working capital. Metro Bank offers flexible contracts with a 28-day notice period. Their online account management system allows you to manage your sales ledger and credit control functions conveniently. Metro Bank assigns a named Relationship Manager for personalized support. Apply online to explore their invoice factoring services.

5.15 Muse

Muse offers a range of invoice finance solutions, including factoring. They provide single invoice factoring for individual invoices, selective invoice factoring where you choose which invoices or customers to factor, and whole book invoice factoring that covers all invoices. The percentage released from unpaid invoices is not stated, so it is advisable to contact Muse directly for more information. They also include sales ledger management services and assign a credit controller to collect payments. Whole book factoring requires a minimum 12-month period, while selective factoring can be done for 3 to 12 months. Enquire online to learn more about their services.

5.16 Nucleus Commercial Finance

Nucleus Commercial Finance offers invoice factoring solutions, allowing you to release up to 100% of your unpaid invoices. With funding ranging from £100,000 to £50 million, Nucleus Commercial Finance provides quick access to funds, often within 24 hours. Repayment terms range from 3 to 7 months, and the facility can be set up within a month. Their in-house team guides you through the process, and their easy-to-use system streamlines the entire experience. Nucleus Commercial Finance is open to businesses in England and Wales. Apply over the phone to discuss your funding requirements.

5.17 Paragon Bank

Paragon Bank offers a range of invoice financing options, including factoring. They advance up to 95% of the invoice value and provide funds within 24 hours. Paragon Bank manages your payment collection process and provides flexible terms to suit your business needs. Their simple fee structure ensures transparency with no hidden fees. With short notice contracts and a dedicated credit controller, Paragon Bank offers reliable support. You can also add Bad Debt Protection for added security. Apply over the phone to explore their invoice factoring services.

5.18 Peak Cashflow

Peak Cashflow offers a choice of invoice finance solutions, including factoring. They provide standard disclosed factoring and confidential factoring options. With Peak Cashflow, you can release up to 85% of unpaid invoices. They offer full credit support and detailed credit checks, ensuring the reliability of your customers. Peak Cashflow also handles payment collections with experienced credit controllers. They offer a free 45-minute consultation to discuss your specific needs. You can also add bad debt protection for added security. Apply over the phone or enquire online to learn more about their services.

5.19 PFC Finance

PFC Finance offers a brokerage service, helping you find the best invoice finance solutions. They provide a choice of invoice finance options and can release up to 90% of unpaid invoice values. PFC Finance seeks out the best options for your business and includes a credit control service to chase payments on your behalf. They cater to various business sectors and are available to businesses of different sizes. Apply over the phone to discuss your specific funding needs with their team.

5.20 Pulse Cashflow Finance

Pulse Cashflow Finance offers a range of invoice finance solutions, including factoring. Their factoring solution, called invoice finance, allows you to release up to 90% of unpaid invoices. Pulse Cashflow Finance provides credit control and sales ledger management services, collecting payments from customers on your behalf. Their facility can grow with your sales, ensuring ongoing funding availability. They have transparent fees, fast decisions, and cater to start-ups and established businesses with a turnover between £350,000 and £15 million. Apply over the phone to discuss your funding requirements.

5.21 Satago

Satago offers flexible, fast Invoice Finance, including Selective and Full financing options. They are the only platform in the UK that lets you instantly switch between single and full invoice finance, as needed. The release amount is up to 90% of the invoice value, but it is recommended to contact Satago directly for more information. 

 With Satago’s Selective Invoice Finance, you can select which invoices to receive funding from, and there is no contractual obligation. Pricing is structured per invoice funded, allowing you to have more control over your funding needs. Alternatively, you can opt for Satago’s Full Invoice Finance to automatically fund all eligible invoices in one go. Satago offers fast approval and drawdown of funds, as well as credit risk tools to assess your prospective and existing customers. Apply online to explore their invoice financing services.

5.22 Satellite Finance

Satellite Finance provides a brokerage service for invoice finance, including factoring. They help you find the best provider based on your specific needs. Satellite Finance can release up to 90% of unpaid invoice values, and they manage your entire sales ledger. They also assist with chasing payments and credit checking potential customers. Satellite Finance operates under a disclosed service. Apply over the phone to discuss your invoice finance requirements and find the right solution for your business.

5.23 Skipton Business Finance

Skipton Business Finance offers a choice of invoice finance solutions, including factoring. With Skipton Business Finance, you can draw up to 90% of your invoice values, accessing funds as soon as invoices are raised. They are supported by a credit control team and provide a tailored facility to meet your specific business needs. Skipton Business Finance offers both discreet and disclosed services. They specialize in CHOCS invoice factoring, a disclosed solution where you retain responsibility for credit control. With a dedicated Relationship Manager, Skipton Business Finance focuses on providing invoice finance for UK businesses. Enquire online to learn more about their services.

5.24 Sonovate

Sonovate offers an invoice factoring funding solution, allowing you to receive advances of up to 100% on your invoices. Funds can be received within 24 hours, providing quick access to working capital. Sonovate operates on a rolling contract basis and has a single fee structure with no setup costs. They provide online account management, which can be integrated with your accounting software, enabling you to generate financial reports and auto-sync transactions. Apply online to explore their invoice factoring services.

5.25 Team Factors

Team Factors offers invoice factoring and recruitment finance services. With Team Factors, you can advance up to 90% of your unpaid invoices and receive funds immediately. Accounts can be set up within 48 hours, ensuring quick access to working capital. They have simple fees with no hidden costs and operate on a rolling contract of 30 days. You have the flexibility to choose to factor some or all of your invoices. Team Factors also provides a customer credit check service, minimizing the risk of non-payment. You can add debtor protection for additional security. Enquire online or call them to discuss your specific funding needs.

5.26 Time Finance

Time Finance offers both confidential and disclosed invoice financing solutions, including factoring. With Time Finance, you can release up to 90% of unpaid invoices. They provide funding within 24 hours and take care of your credit control processes, chasing payments on your behalf. Their online system allows for easy loading of invoices, streamlining the process. Time Finance caters to start-ups and large businesses and offers the option to add Selective Bad Debt Protection. Apply over the phone to explore their invoice factoring services.

5.27 Trade Finance Global

Trade Finance Global provides a brokerage service for invoice finance, including factoring. They offer a choice of invoice finance options and search for the best financing solution based on your specific needs. Trade Finance Global operates under a disclosed service, managing your sales ledger and undertaking credit checks on customers. They cater to both domestic and international invoices and can accommodate businesses of various sizes. With a team of product specialists, Trade Finance Global provides expert advice. Enquire online or call for more details on their services.

5.28 Ultimate Finance

Ultimate Finance offers a choice of invoice finance solutions, including factoring. With Ultimate Finance, you can advance up to 95% of unpaid invoice values. They provide funding facilities ranging from £100,000 to £5 million, catering to different funding needs. The facility can be set up within a week, and funds can be received within 24 hours. Ultimate Finance operates under a disclosed service, managing your credit control and ensuring efficient payment collections. They provide a dedicated specialist relationship manager to support your business. Apply over the phone to discuss your funding requirements with their team.

5.29 White Oak

White Oak offers a choice of invoice finance solutions, including factoring. With White Oak, you can advance up to 95% of your invoice values. They provide a lending facility ranging from £200,000 to £5 million, offering substantial funding options. White Oak operates under a disclosed service, managing your sales ledger and collecting customer payments on your behalf. Their debtor terms range from 30 to 120 days, providing flexibility. White Oak specializes in working with businesses with a turnover of £200,000 to £10 million, and they require a minimum trading period of 3 years. Apply online or request a callback to discuss your invoice finance needs.

6. Key Takeaways

Invoice factoring can be an effective solution for small businesses to improve cash flow and access working capital. By leveraging unpaid invoices, businesses can receive advances on their invoice values, allowing them to focus on core operations. In the UK, there are several reputable invoice factoring companies that provide these services. Some of the key takeaways from this guide include:

• ABC Finance, ABN AMRO Commercial Finance, Advantedge, Aldermore, Bank of Scotland, Bibby Financial Services, Close Brothers, Danske Bank UK, giant finance+, Hitachi Capital, HSBC, Lloyds Bank, MarketFinance, Metro Bank, Muse, Nucleus Commercial Finance, Paragon Bank, Peak Cashflow, PFC Finance, Pulse Cashflow Finance, Satago, Satellite Finance, Skipton Business Finance, Sonovate, Team Factors, Time Finance, Trade Finance Global, Ultimate Finance, and White Oak are among the top invoice factoring companies in the UK.
• These companies offer various invoice finance products, including factoring, and provide services such as credit control, sales ledger management, and payment collection.
• The maximum release value of unpaid invoices varies among providers, with some offering up to 100% of invoice values.
• Applying for invoice factoring usually involves contacting the provider directly, either through phone or online channels.
• The cost of invoice factoring includes service charges and percentage rate fees applied to each transaction, with some providers offering bespoke services tailored to specific business needs.
• Invoice factoring terms depend on the customer invoice terms, as payments are directly collected by the provider.
• Selective invoice factoring allows businesses to choose specific invoices or customers to factor, while whole book factoring covers all invoices.
• Some providers offer discreet or confidential factoring, operating under the business’s name to maintain confidentiality.
• Bad debt protection is often available as an add-on to protect against non-payment or late payments.
• It is essential for businesses to consider their specific funding requirements, terms, fees, and services offered by different invoice factoring companies before making a decision.

Invoice factoring can provide much-needed financial flexibility for startups and small businesses in the UK. By leveraging the services of reputable invoice factoring companies, businesses can improve cash flow, manage credit control, and focus on growth and expansion.

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